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TRADE DISPUTES

US in talks with China, EU to end trade dispute over solar panels

PUBLISHED : Wednesday, 22 May, 2013, 12:00am
UPDATED : Wednesday, 22 May, 2013, 5:31am

The Obama administration is engaged in talks with the European Union and China to settle a dispute over trade in solar-energy equipment and avoid a conflict among the world's largest economies, according to people familiar with the discussions.

The preliminary negotiations focus on setting a quota on Chinese exports and a minimum price for solar-energy equipment, in exchange for suspending US duties on the goods, according to two people familiar with the US position who asked not to be identified to discuss private discussions.

After expressing our intentions to the White House, we are very encouraged that these long-needed negotiations appear ready to proceed

"After expressing our intentions to the White House, we are very encouraged that these long-needed negotiations appear ready to proceed," said John Smirnow, vice-president of trade and competitiveness for the Solar Energy Industries Association. "It's time for everyone to work together towards a fair resolution of these cases."

Representatives from the Washington-based solar group and the Singapore-based Asia Photovoltaic Industry Association met last week in China to discuss the trade disputes, Smirnow said. A policy resolution by the groups urged the US, China, EU and other nations to enter multilateral talks to quell rifts over solar-energy goods, he said on Monday.

Tensions over China's policies flared in recent months and each of the partners has either imposed or is considering duties to limit imports of solar-energy goods. Government support for renewable-energy products including solar panels has led to disputes as the price of polysilicon, the main ingredient in solar cells, has dropped 64 per cent since December 2010.

Michael Froman, a White House adviser and President Barack Obama's nominee to head the US trade office, has briefed senators in recent weeks on the preliminary talks with officials from China and the 27-nation EU, according to a Senate aide, who did not want to be identified.

The New York Times reported on Monday that the trading partners were considering settlements to end the cases.

"Our goal is to support a healthy global solar industry in conditions that foster the adoption of renewable energy and continued innovation and a level playing field for all," said Carol Guthrie, a spokeswoman for the USTR. "We will continue to work with industry and our trading partners to explore ways to resolve concerns."

The US wants to co-ordinate with the EU, which is a larger market and has not yet imposed final duties to block Chinese goods from being sold in the EU below cost, according to an industry official. The US wants to avoid giving Chinese producers a way to bypass a deal with the EU by sending partially finished equipment to the US for final assembly and export, duty free, to Europe, the person said.

The manufacture of photovoltaic modules in China grew sixfold from 2009 to 2011.

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